Altair sees stimulus plan as both promise and problem

Altair Nanotechnologies, the Reno company that's involved in development of an advanced battery system, sees a lot of promise in the federal stimulus package.

But maybe not right away, and certainly not easily.

"The federal stimulus plan could help our company zoom from zero to 100 miles per hour," said Terry Copeland, Altair's president and chief executive officer, during a conference call with investment analysts last week. "But in the short term, it's also acting as a brake."

The company sees strong potential in providing stationary power systems big batteries, essentially for utilities that are upgrading their grids. That work is getting a jump start through the federal stimulus plan.

But Copeland said no one should expect a quick pop to Altair's earnings. At best, he said, orders won't arrive until this autumn.

And he said some utility customers are delaying orders for electric-storage systems while they sort through the potential incentives in the stimulus package.

And that's a challenge for the company, which continues to burn through cash.

In the first quarter, Altair reported a loss of $6.4 million. That compares with a loss of $8.3 million a year earlier.

Revenues declined to $900,000 from $1.1 million in the first quarter of 2008.

At the end of the quarter, Altair had nearly $22 million in cash on its books roughly enough to support it

for a year.

Copeland said Altair continues to look at ways to raise more capital and continues to squeeze its costs to reduce its consumption of cash. At the same time, he noted that the company has better cash reserves than most of its competitors in the nascent energy-storage industry.

The company is confident enough about its ability to win energy-storage contracts that it's beginning to modestly build inventories of some components, Copeland said.

But he cautioned that an uptick in the business isn't likely to lead to profitable operations this year or even in 2010. Higher production volumes might bring profits in 2011, he said.

Another possible use of Altair's battery technology is electric-powered vehicles, but Copeland tried to dampen investors' expectations.

While electric cars are getting a lot of media attention, Copeland believes that mass-transit vehicles likely will represent the biggest early application of battery-powered vehicles.

An early venture into electric vehicles a deal in which Altair would provide batteries for start-up manufacturer Phoenix Motorcars has come to nothing. Altair took a small equity stake in Phoenix as part of that transaction, but decided during the first quarter to write down the value of that investment to nothing.